BHP Scraps $50 Billion Takeover of Anglo American -- 5th Update

By Christian Moess Laursen and Mauro Orru

Australian mining giant BHP Group walked away from a $50 billion takeover of London-based rival Anglo American after failing to agree on the structure of a deal, ending a five-week endeavor to create the world's largest copper producer.

BHP, the world's largest miner by market value, said it would no longer be making a firm offer for Anglo American after being locked in a procession of rejections and improved bids for weeks.

Several attempts from BHP to sweeten its bid underscore a growing appetite for Anglo American's copper production at a time when demand for the metal is expected to rise as the world decarbonizes and supply tightens.

Copper represents about 30% of Anglo American's output, while BHP counts a majority stake in Chile's Escondida, the world's biggest copper mine, among its assets.

The pullout from what would have been the largest deal on record in the mining industry comes hours after BHP laid out a range of measures aimed at easing Anglo American's concerns on the deal's structure. However, the group dismissed BHP's proposals, saying that Anglo American shareholders would bear disproportionate risks and face uncertainty over an extended period.

The latest offer valued Anglo American at GBP29.34 a share--or 39.24 billion pounds, equivalent to $49.87 billion.

"We remain of the view that our proposal was the most effective structure to deliver value for Anglo American shareholders," BHP Chief Executive Mike Henry said after scrapping the deal.

Henry said the companies couldn't agree on specific views with respect to South African regulatory risks and costs, adding that BHP wasn't able to access key information it needed from its rival to make proposals that could have addressed the excess risk perceived by Anglo American.

BHP had proposed the spinoff of Anglo American's South African units, Anglo American Platinum and Kumba Iron Ore, with the two units retaining listings in Johannesburg and being run by South Africa-based management teams. Headcount at Anglo American's Johannesburg office would have been maintained.

The Australian group had also committed to building a training facility in South Africa in an effort to promote the country as a mining destination, saying these measures--which would be maintained for at least three years--would address Anglo American's concerns.

Anglo American reiterated that it preferred to chart its own course as a standalone company. Earlier this month, the group accelerated a business overhaul to break itself up in a move to fend off BHP. BHP, for its part, said that its proposals would provide greater economic benefits to South Africa than Anglo American's plans.

After BHP's offer was rejected for the third time last week, speculation mounted that other bidders could throw their hat in the ring, with analysts pointing at Glencore, Rio Tinto and Vale as the most likely candidates, though none have come forward.

Write to Christian Moess Laursen at [e-mail] and Mauro Orru at [e-mail]

(END) Dow Jones Newswires

05-29-24 1149ET